Introduction
Croatian Digital Content and Digital Services Act
New rights and more protection for consumers
Comment
The Act on Certain Aspects of Contracts for the Supply of Digital Content and Digital Services (the Digital Content and Digital Services Act) entered into force on 1 January 2022(1) and transposes the EU Digital Content Directive.(2)
The EU Digital Content Directive sets out a single set of rules within the EU market concerning contracts for the supply of digital content (such as computer programs and mobile apps, as well as video and audio files in digital form) or digital services (such as cloud and social media), in particular:
- rules on conformity with the contract; and
- remedies where the digital content or digital service does not conform or if there is a failure to supply.
The EU Digital Content Directive applies to any contract where a trader supplies digital content or digital services to the consumer and the consumer pays or undertakes to pay a price. It also applies when the consumer does not pay a price but provides or undertakes to provide personal data to the trader, unless the personal data provided is only processed for the purpose of supplying the digital content or digital service or for the trader to comply with legal requirements.
Although the EU Digital Content Directive is meant to fully harmonise the supply of digital content and digital services at EU level, there are many opening clauses that the member states can use, and that give them a certain freedom.
Croatian Digital Content and Digital Services Act
In this regard, the Croatian Digital Content and Digital Services Act has almost entirely transposed the provisions of the EU Digital Content Directive. However, Croatia has adapted the provision regarding the requirements for the formation, existence and validity of a contract in accordance with its existing relevant legislation, the Consumer Protection Act and Civil Obligations Act. Furthermore, in line with its obligation under the EU Digital Content Directive, Croatia has declared the state inspectorate as the competent body to ensure that the national provisions transposing it are applied.
In line with the EU Digital Content Directive, the Digital Content and Digital Services Act therefore prescribes rules on:
- the conformity of digital content or digital services with the contract;
- ways of supplying digital content or digital services;
- the modification of digital content or digital services;
- legal remedies in case of a breach of a provision of the contract;
- the prescription of competent bodies for supervising the implementation of the Digital Content and Digital Services Act (ie, inspectors of the state inspectorate); and
- the prescription of misdemeanor penalties in the event that the trader acts contrary to the Digital Content and Digital Services Act.
However, the Digital Content and Digital Services Act does not apply to:
- contracts on the purchase and sale of goods (regulated by EU Directive 2019/771);
- internet access;
- text messages (such as SMS messages), with the exception of numerically independent interpersonal communication services;
- healthcare;
- gambling services;
- financial services;
- software offered by the merchant under a free and open licence (where the price is not paid and personal data provided by the consumer is processed solely for the purpose of improving that particular software); and
- digital content when it is part of a performance or event, such as digital cinematographic projections and digital content provided by public sector bodies.
New rights and more protection for consumers
New rules set out in the Digital Content and Digital Services Act should bring new rights and more protection for Croatian consumers. Only 8% of Croatian consumers buy online from other EU countries and have generally missed out on the potential of a broader choice of products and better prices. The new legislation aims to change this. Increased competition should drive consumer prices down throughout the European Union, which should lead to additional consumer welfare.
For instance, a Croatian consumer who paid to download a movie (eg, through a streaming service such as Netflix) and finds the quality of sound and image of a film to be poor may ask the supplier to provide them with another version of the movie that works properly. If this is not feasible or the supplier fails to do so, they can choose between keeping the movie and getting a price reduction, or asking for a full refund.
As a further example, when a Croatian consumer buys a new smartphone advertised for its high-resolution camera from an online electronics store in another EU country, but the camera takes low-resolution photos, they may go back to the online seller and ask them to fix the issue within two years from the day they purchased the smartphone. If the seller does not or cannot fix the problem, they can choose between keeping the phone and getting a price reduction, or returning the phone for a full refund.
Although the EU Digital Content Directive aims to harmonise the EU digital market, it is yet to be seen whether the anticipated full harmonisation will be achieved. It will also be interesting to see how the rights and obligations of consumers and traders will affect the business environment and consumer protection in Croatia.
For further information on this topic please contact Hana Fiala or Ivana Manovelo at Maćešić & Partners by telephone (+385 51 215 010) or email ([email protected] or [email protected]). The Maćešić & Partners website can be accessed at www.macesic.hr.
Endnotes
(1) Official Gazette No. 110/2021.
(2) Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services (Text with EEA relevance.).